H.B. 466 must be about something other than privatizing state stores (w/video)

It is hard to argue that it is less convenient to purchase wine, beer and alcohol at a single location. Currently we have to buy wine and alcohol at the Fine Wine & Good Spirits stores, beer by the case at a beer distributor and beer by the six pack at a tavern or deli. 

House Bill 466 seeks to remedy that situation. However, the details of the bill fall short of achieving that goal while putting steady, recurring revenue to the commonwealth in jeopardy. A number of liquor-privatization bills have been drafted during my four years in the Pennsylvania House. Hearings were held in 2011 and 2012; however, no hearing on the bill as it is currently drafted – H.B. 466 or last session’s H.B. 790 – has been held, and these bills are substantially different. It is a 200-page bill that contains many details and appears to be missing details, too.

The first concern should be why this legislation is not being vetted publicly, as it seeks to alter substantially the system that has existed for over 80 years. Many diverse stakeholders will be affected by this legislation if it becomes law. Those stakeholders range from law enforcement to MADD, to beer distributors and tavern and deli owners, to grocery stores to agencies that provide drug and alcohol treatment programs, and not least of all the 3,000-plus current employees of the state-store system.

As always, I endeavor to share the facts of any public policy matter.  

The following are a few facts about H.B. 466:

Consumers would be able to take advantage of a "one-stop shop" only under the following scenario:

  • A beer distributor that acquires two separate licenses – one for the purchase of wine and another for the purchase of alcohol – would then be able to provide beer by the case or six pack, wine and alcohol – all in one convenient location. 

  • Grocery stores would only be permitted to sell wine. Private retailers would only be able to sell wine and alcohol and not beer.

I checked with my favorite banker, and he said that financing of liquor and related licenses is difficult, which explains why the legislation includes a provision that would allow the state to offer financing over 48 months at a 5 percent fee, which in reality is a 5 percent interest rate. How ironic is it that we are exiting the "state-store" business and becoming bankers?

It should be our collective goal to ensure greater convenience and to do so in a fiscally responsible manner. We are facing a $2.3 billion structural state-budget deficit, and the one-time revenue to be gained in conjunction with the current operating revenue would only exacerbate a difficult financial situation.

At the very least, I look forward to boosting revenue by supporting expanded hours on Sundays, having no limitations on the number of stores to be open on Sundays, and giving the PLCB flexibility in its pricing and procurement methods. I am also supportive of allowing wine to be shipped from an out-of-state winery to an individual at his or her home.

For all these reasons and more, and in my humble opinion, H.B. 466 is simply not about the privatization of the state stores.